CIMA-HKSAR Submission Policy Address 2024

Mr John KC Lee, GBM, SBS, PDSM, PMSM

Chief Executive

The Government of the Hong Kong Special Administrative Region

2 Tim Mei Avenue

Tamar, Hong Kong

By email: [email protected]; [email protected]

25 September 2024

Dear Mr Lee,

POLICY ADDRESS 2024

As a leading professional business and accounting organisation, The Chartered Institute of Management Accountants (CIMA) has a long-standing relationship with the global business community.

We welcome the opportunity to contribute to the development of the Hong Kong Government's Policy Address 2024. We would like to suggest that the theme of the Policy Address 2024 should be to Accelerate and Lead the economic growth of Hong Kong and the Greater Bay Area.

We believe there are a number of important policy matters already underway, and which if progressed more quickly have great potential to contribute to the success of the Hong Kong economy. These can be distilled into three priority areas:-

1. Accelerate delivery of the government's digitalisation programme, with a particular focus on the needs of the local and global business community.

2. Accelerate and lead on cross border business within the Greater Bay Area, and focus on the key initiatives which will have the most influence over the future ease of doing business.

3. Accelerate the development the future talent pipeline in Hong Kong with a focus on the necessary business and professional skills that support a strong economy.

Accelerate delivery of the government's digitalisation programme, with a particular focus on the business community.

Hong Kong presents important opportunities as a gateway to the capital markets, with the ability to appeal to the local and global business and finance community. Innovation and technology were a key focus of the 2023 Policy Address and we understand that there are planned initiatives to support a future digital economy. Alongside the business community, we would support many of the current proposals, but the timetable for delivery is an important consideration.

In preparing this submission, we have engaged and listened to our members and business leaders in Hong Kong. They have commented on their experience of the business environment, and highlighted that there are a number of company-related processes that could be easily digitalised. They believe there is a growing need to accelerate the pace of the digital reform programme that is underway in Hong Kong, with a particular focus on the needs of the local and global business community that are important stakeholders for Hong Kong and the Greater Bay Area. If Hong Kong leads the way then other parts of the Greater Bay Area will be encouraged to accelerate their own path to digitalisation, thereby helping business to operate more effectively across the whole region.

There are many initiatives already on the government's action plan which we would acknowledge and encourage, with the added recommendation that an early deliver timescale would send an important message to business and the capital markets that Hong Kong and the Greater Bay Area are committed to being a leading global finance centre for Asia. The planned changes to company registration and business ID are good examples of initiatives that should be prioritised, but there are also some legal and administrative processes relating to company banking and finance that are ripe for digitalisation. Companies should not need to retain physical records of documents that could otherwise be held in digital format, and an accelerated move towards a digital economy should also help to move business to a digital payments system (and eradicate the historical dependency on counter-signed cheque payments).

Technology is transforming the business world and is a powerful enabler for local and global trade. It is also an increasingly important aspect of many companies' commitment to the corporate sustainability agenda, as the demand for green finance continues to develop at pace around the world.

Beyond the digital transformation programme for business, we would encourage Government to continue to develop policies which are designed to provide a stable business environment for Hong Kong companies, including developing company and business investment related policies that have multi-year commitments so that business can plan, and invest, for the future. Communicating and articulating policy intent, actions and timelines would also allow businesses to better work hand in hand with Government and enhance resilience in their strategy and operations to take account of these potential changes.

Accelerate and lead on cross border business within the Greater Bay Area, and focus on the key initiatives which will have the most influence over the future ease of doing business.

Hong Kong is central to the future economic growth of the Greater Bay Area, and has the power to shape and influence for the better the flow of trade within the economic region. There are barriers to trade within the Greater Bay Area economic region that need to be addressed. It ought to be seamless for companies to do business within the Greater Bay Area, and yet there are complicated legal requirements in each region which lead to increased complexity and costs. An example cited by one member is

the need for Hong Kong companies to establish a separate legal entity in Macau in order to trade within the economic region. Another cited example is the varying data requirements which regulate the flow of information and data within the region.

Hong Kong wields considerable influence within the Greater Bay, and we hope that the

2024 Policy Address includes a focus on Hong Kong's wider role as an advocate for business and the policies that can help consolidate economic growth within the region and build the trust and confidence of business.

Accelerate the development of the future talent pipeline in Hong Kong.

The future economic growth of Hong Kong and the Greater Bay Area is dependent upon the region's access to a strong talent pipeline. We would encourage the government to focus on two or three key policies which will make Hong Kong an attractive location for local and global business who want to have access to a pool of top talented finance professions in the future. This will require long-term planning, starting today, but Hong Kong has always had a strong appeal to business at a local and global level as a centre for finance, which should be both celebrated and enhanced.

Hong Kong is an established business centre, and we continue to hear from our members that there is a high demand for talent. Many have referenced their ongoing challenges with the recruitment and retention of individuals with relevant skills and experience in leadership, management and finance. The demand for talent in Hong Kong and the Greater Bay Area should not be underestimated, and should be considered a top priority for the 2024 Policy Address.

Skills and labour are an integral component of a strong economy, and mobility of nonChinese nationals to and from the Mainland would help to address the growing skills shortages faced by the current business community, and build confidence for their future investment in the Greater Bay Area. Despite important demographic challenges posed by an aging population, there is also a need to equip the current workforce with the necessary skills for the future, through a programme of education and training. As well as an ever-increasing focus on technology, there is a particular shortage of the business and finance professionals who are critical to the success of the small and medium sized companies that dominate the Hong Kong and Greater Bay Area economy. They are the engine room of the local economy and will make an important contribution to the region's future economic growth.

The Continuing Education Fund (CEF) offers a ready framework for the Government to positively encourage people to take control of their own career development, through training and education. More could still be done to maximise the potential benefits of the CEF. For example, to promote future finance skills it could be extended to include the full reimbursement of tuition and examination fees for taking professional examinations such as CIMA, CPA or ESG related learning which is of growing importance to the Hong Kong economy. Particular consideration should be given to including qualifications which are delivered digitally by providers outside Hong Kong.

CIMA offers a number of digital qualifications, including the Digital Management Accountant qualification which was developed for China, and our global Finance Leadership Programme. Policy changes which enable the current workforce to access global qualifications and credentials would in turn help ensure businesses located in Hong Kong have access to the future talents with the right skillsets they require.

Management accountants play an important role in delivering company strategy, driving organisational performance and value creation. CIMA's management education and training are well recognised as a global qualification for top business leaders, and in the public sector and has achieved recognition in ten major provinces/cities/areas including Beijing, Shanghai, Shanghai Pudong New Area, Guangzhou, Chengdu, Chongqing, Wuhan, Huizhou, Jiangsu and Hainan). Over the last several years we have worked with the local government to deliver a global qualification that is recognised and valued by business and finance professionals alike, and which provides a strong career path. We continue to support the future economic growth of the finance profession.

Similarly, we would be delighted to explore how CIMA can help government to take forward a proposal for enhanced recognition within Hong Kong of our Chartered Global Management Accountant (CGMA) qualification and designation. Talent will always be attracted to the city, but it is vital that there is a strong sense of mobility, job security, long-term career prospects and medium-term benefits.

CIMA and its members in Hong Kong stand ready to help the government shape its business policies, that not only make Hong Kong a great place to live and work today but help build a strong skills and talent pipeline for the future.

Yours sincerely,

Andrew Harding

Secretary General CIMA

Margaret Mak

Chairperson, HKSAR Area Committee

CIMA

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